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CARRIER FORECAST
John C. Ziambras, CLU, President and Chief Executive Officer
Turning Gunpowder Into Pixie Dust
The January issue of Broker World is always one of great antici-
pation as our industry’s premier brokerage manufacturers share their
industry insights and plans for the coming year. The need for change
is always one of the key messages and there is always a strong element
of optimism in their commentary, as there should be. And while we
have seen some good news coming out of LIMRA in recent quarters,
the dawn of 2016 finds us still facing more questions than answers.
I know that this year, we will learn about insurance company deci-
sions that we will not like, we will witness industry developments
that we did not foresee, and we will face challenges that we did not
anticipate. But hasn’t this been par for the course for a while now folks?
On the flight back from NAILBA 34, I was trying to picture what
NAILBA 40, or even 37, will be like. There is so much pride in the ranks
of the BGA community about what we have accomplished the last three
decades, and rightfully so. But, for quite some time now, it has become
alarmingly apparent that a glorious track record of accomplishment
and the traditional way of doing business are almost irrelevant as far
as future success in our business is concerned. So let’s stop wasting
time by finding solace in the rear-view mirror and let’s collectively
focus all of our energy, brain power and capital in transforming our
business in a way that will keep it relevant, sustainable and successful
for the next generation.
Winston Churchill once said that fear is a reaction but courage is a
decision. Listing the variety of fears our business faces today should
be redundant to the readers of this article, so let’s focus on some of the
courageous decisions that could help set us on a better path:
Data Versus Operational Excellence
It is becoming clear, on so many levels, that data will play such an
integral role in our business going forward. Data in the presale stage
(whether it is consumer trends, buying propensity, social media reach
and effectiveness, risk class pre-qualification, etc.) or after the decision
to buy is made (when whatever medical or other information still neces-
sary will be instantly and readily available) will be the one of the main
drivers of life insurance acquisition.
Stop Versus Start Investment Decisions
Don’t spend any more money trying to preserve what has always
been there. Rather, redirect all or most of your dollars towards business
development and revenue-generating activities. Bricks and mortar will
not keep generating premium for you; your ability to identify, engage,
educate and enable the next person who can position and sell a life
insurance policy will. I want you to call this “margin decompression”.
Consumer is King
I always thought that one of our fundamental flaws has been that
we are so inwardly focused, as carriers and BGAs tend to talk amongst
themselves or to each other in search of the answers. I can’t think of
a recent meeting or article in which companies the likes of Google,
Amazon, and Facebook were not mentioned as an imminent threat to
our business. I find the relentless focus on the needs and wants of the
consumer to be the main driving force behind the remarkable success
of these companies.
The definition of disintermediation is the attempt to do away with the
intermediary entities between two primary market forces, i.e. eliminate
the middleman. That’s us, isn’t it? It will be, but only if we allow it.
Every consumer research piece that I read about the future purchase of
our products indicates that nine of ten people will need to speak—in a
broader sense—to someone before they buy. If that doesn’t excite you
and give you the impetus and courage to look at the future of your
business differently, I don’t know what will.
Quite the food for thought in just a few paragraphs, I know, but,
since this issue is really dedicated to them, I would be remiss if I didn’t
lay out some suggested New Year’s resolutions for our manufacturing
partners. So, my dear carriers, I strongly urge you to continue to invest
in and reward those organizations that:
• Have a vision that extends beyond the next couple of years, a
detailed plan on how to get there and the demonstrated ability to execute
on their strategic objectives;
• Create and enable new distribution rather than trade existing
distribution, and have a plan to drive organic growth versus growth
by aggregation;
• Work diligently to ensure succession and continuity, and empower
the youth in their ranks to take the lead in shaping the future;
• Are willing and able to make the right investment decisions in
building, in conjunction with you, the combined value proposition that
will be necessary to effectively engage with and deliver product to the
life insurance consumer of tomorrow.
Any high-priced consultant or savvy investor will tell you that an
industry that is flat or in decline is an industry of tremendous oppor-
tunity. There is more capital and latent investment on the doorstep of
life insurance distribution than ever before because, simply, things are
not working out the way they should or could. But it is not so much the
need but the pace of change that should keep us up at night. We always
need to keep in mind, though, that most of the modern-day innovation
that continues to change industries, our everyday life as we know it,
and keeps this country great and ahead of everyone else, emanates from
the entrepreneurial and not the corporate world. The BGA world has
always been one of great entrepreneurship and this is not the time to
get complacent and rest on our laurels. Let’s continue to dream, and
let’s make the difficult and painful decisions today, so that what we all
wake up to tomorrow is not gunpowder but pixie dust—that magical,
golden, glitter-like powder that grants the ability to fly! [JCZ]
AIMCOR Group
Reprinted from BROKER WORLD January 2016
Used with permission from Insurance Publications Subscriptions $6/yr. 1-800-762-3387
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